Q4 2022 Alamo Group Inc Earnings Call
Greetings and welcome to the Alamo groups fourth quarter 2022 conference call. At this time, all participants are in a listen only mode.
A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Ed Rizzuti Executive Vice President General Counsel and Secretary. Please go ahead.
Thank you.
By now you should have all received a copy of the press release. However, if anyone is missing a copy.
To receive one please contact us at 2128 to 73746, and we will send you a release and make sure you're on the company's distribution list.
There will be a replay of the call, which will begin one hour after the call and run for one week. The replay can be accessed by dialing 8445229 to one with the pass code one <unk> 734940.
Additionally, the call is being webcast on the company's website at Www Dot Alamo dashed group Dot com and a replay will be available for 60 days.
I don't know line with me today are Jeff letter, President and Chief Executive Officer, Richard <unk> Executive Vice President Chief Financial Officer, and Treasurer, and Dan Malone, Executive Vice President and Chief Sustainability Officer.
Management will make some opening remarks, and then we'll open up the line for your questions.
During the call today management may reference certain non-GAAP numbers in their remarks reconciliations of these non-GAAP results to applicable GAAP numbers are included in the attachments to our earnings release.
Before turning the call over to Jeff I'd like to make a few comments about forward looking statements.
We will be making forward looking statements today that are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Forward looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results.
Among those factors, which could cause actual results to differ materially are the following market demand.
COVID-19 impacts, including operational supply chain disruptions competition weather seasonality currency related issues geopolitical issues and other risk factors listed from time to time in the company's SEC reports.
The company does not undertake any obligation to update the information contained herein, which speaks only as of this date.
I would now like to introduce Jeff Leonard Jeff. Please go ahead. Thank you Ed we want to thank all of you for joining us today.
Richard will begin our call with a review of our financial results for the fourth quarter and year end 2022, I will then provide additional comments on our results. Following our formal remarks, we look forward to take your question. So Richard Please go ahead. Thanks.
Thanks, Jeff and good morning, everyone Alamo groups fourth quarter 2022.
With the solid performance that produced record net sales and net income driven by a strong demand for our products, despite persistent supply chain and labor shortage headwinds.
Fourth quarter consolidated net sales for 2022, or $386 6 million increase of 15% compared to $337 2 million in the fourth quarter of last year.
Fourth quarter net sales were negatively impact to just over 3% by currency translation compared to the fourth quarter of 2021 as the U S. Dollar continued to strengthen.
Gross margin dollars in the quarter improved compared to the fourth quarter of 2021 by $14 1 million as.
As the gross margin percent, which was up 50 basis points due to both price initiatives taken earlier in the year as well as improved manufacturing efficiencies both margin dollars and percentages percentage were negatively impacted by supply chain issues labor shortages and freight cost on inbound inventory.
Tori as surcharges continue to be added to already significantly higher freight invoices consol.
Consolidate consolidated net income for the fourth quarter of 2022 was $29 2 million or $2 44 per diluted share an increase of 52% versus net income of $19 2 million for one points or $1 62 per diluted share for the fourth quarter of 2021 are.
Efforts to control cost both cost and expenses helped to support the increase in profitability.
Vegetation management Division delivered a solid fourth quarter for 2022 as markets remained strong fourth quarter 2022, net sales were $232 5 million, an increase of 14% compared to $204 3 million for the.
The fourth quarter of 2021 strong demand for forestry tree care and agricultural and governmental mowing products in both North America and Europe led the way for this division.
Despite labor shortages and supply chain disruptions margins improved primarily due to an increase in net price realization and improved operating efficiency.
Operating income for the fourth quarter of 2022 was $32 million.
Up 67% versus $18 1 million for the same period in 2021.
Industrial equipment Division net sales in the fourth quarter of 2022, or $154 1 billion up 16% compared to $132 8 million for the fourth quarter of 2021.
This is due to our solid performance as snow removal products and to a lesser extent improved net sales in the division excavator vacuum truck and sweeper product lines.
Truck chassis delivery showed improvement this quarter other component part shortages continued to impact this division's operations, which in turn drove unfavorable manufacturing efficiencies, although not as significant as in previous quarters.
Operating income in the fourth quarter of 2022 plus.
<unk> was $12 5 million compared to $8 7 million for the fourth quarter of 2021, an increase of 28%.
Consolidated net sales were a record for the full year 2022.
Coming in at $1 5 billion up 13% compared to $1 3 billion for the full year of 2021 as strong demand for our products in both the company's divisions, along with positive impact of price initiatives were the main drivers of the increased.
Full year gross margin for 2022 was up over $42 million versus the full year of 2021.
Margin percentage was down about 20 basis points as we experienced inflation in material cost purchase components and higher inbound freight costs.
All of which resulted in higher absorption costs.
Net income for the full year of 2022 was $101 9 million or $8 54 per diluted share also a record versus net income of $8 2 million or $6 75 per diluted share for the full year of 2021, an increase of 27%.
Full year 2022, net sales for the vegetation management division for $937 1 million compared to $812 7 million for 2021 up 15% the.
The division experienced robust demand in all product categories, particularly forestry free care and in both North American and European agricultural and governmental mowing.
Full year 2022, operating income was $108 5 billion up 37% versus $78 9 million for the prior year.
For the full year 2022, net sales for the industrial equipment Division for $576 6 million compared to $521 5 million for 2021, an 11% increase.
Sales of excavators in vacuum trucks led the way, but all product lines contributed in 2022.
Full year 2022, operating income was $40 1 million versus $38 million for the full year of 2021, an increase of 5%.
This divisions results were negatively impacted by constrained chassis delivery supply chain disruptions manufacturing inefficiencies and higher input costs in both material and inbound freight costs.
The company's backlog at the end of 2022 came in just over $1 billion. This was an increase of 26% compared to backlog for the full year of 2021.
This positions the company up for an excellent start for 2023.
Turning to a few additional financial items for the year end 2022 about sheet continues to remain strong working capital increased to $117 billion to 537 million from $420 million at the end of 2021.
The increase in working capital results from higher accounts receivable and inventory.
Accounts receivable were up $318 million up.
33% from a year ago.
<unk> sales volume.
Continue to be really pleased with receivables and bill major issues on collections and incoming cash remains very steady.
Inventory is up almost 32 million compared to the end of 2021. This is a reflection from higher work in process, although down from the last two quarters.
Zero cost inflation as well as our efforts to support growing demand for our products by purchasing higher levels of key components.
And service parts for our customers during this time of constraint supplies.
The increase is also reflected our modestly higher debt levels and finally, the company's trailing 12 month EBITDA is a record 196 million thats up 21% compared to 2021.
For 2023 incoming cash flow remains strong as our focus on the balance sheet will be to reduce both inventory and debt levels.
Increasing consolidated profit for 2023 will be extremely important as we will continue to be disciplined in controlling costs and expenses.
Inflation is expected to continue to put pressure on our margins.
We will also adjust prices as needed based on changes in material and transportation cost in order to maintain our target margins.
We're also focusing on future.
On further improvements.
Supply chain performance to help reduce the amount of inventory, we hold and work in process. Our biggest challenge will be in meeting the heightened demand for our products throughout the company given current supply chain constraints and labor shortages.
We're pleased that our board recently approved a 22% increase in our regular dividend of <unk> 22 per share for the first quarter of 2023.
With that I'll turn the call back over to Jeff. Thank you Richard I'd also like to again, thank everyone, who has joined our conference call. Today. We were very pleased that the company was able to leverage positive and sustained market momentum set new records for sales and earnings for our fourth quarter and to cap off 2022, with the best full year financial results and <unk>.
Any history.
Sales in both of our operating divisions were up by double digits as our markets continued to display the significant strength that we experienced throughout 2022.
Net sales increased by 15% compared to the fourth quarter of 2021, despite currency translation effects to reduce sales by more than 3% or $10 $5 million during the period.
For the full year 2022 sales more than 13% with currency translation, having a negative impact of two 4% or $32 million.
The vegetation management Division net sales in the fourth quarter Rose, 14% led by nearly 20% increase in sales of forestry and tree care equipment, and a more than 20% increase in sales of governmental mowing equipment in North America.
Sales of this division's products in South America also increased more than 20% while sales to the agricultural segment in European sales of governmental mowers were seasonally softer, but still showed nice growth.
Industrial equipment divisions fourth quarter net sales were up 16% led by a 26% increase in sales of street sweepers into brief collection equipment, while sales of its excavators and vacuum trucks were up by nearly 15%.
The cold weather experienced in many parts of North America. During the quarter also drove sales of the division's snow removal equipment and related spare parts up by 12%.
Supply chain performance also continued to improve in the fourth quarter compared to the prior year class eight truck chassis receipts, where approximately 40% higher than the fourth quarter of 2022, while receipts of class six and seven chassis declined modestly during the same period.
Although we remain constrained by chassis capacity allocations from the major manufacturers. This improvement in class eight chassis receipts supported nicely improved sales of our larger vocational trucks within the industrial equipment Division.
Supplies of other critical industrial components, such as hydraulics and wiring harnesses automation equipment remained in shortage and continue to impair our operating efficiencies and constrained further sales growth.
<unk> power availability remained concerning to us and we ended the quarter with more job openings than we anticipated.
As we've reported throughout the year the margin in our backlog remains excellent and this was evident in our results for the quarter fourth quarter gross margin of 25, 3% was the highest of the year.
Our teams also did an excellent job of managing controllable costs.
Fourth quarter operating expenses were almost 2% lower than the prior year, reflecting our focus on streamlining our cost structure and increasing operating flexibility. We also ceased operations at one of our U S. Snow removal manufacturing facilities and consolidated these activities into one of our larger plants during the fourth quarter.
Higher top line sales.
Pretty expenses drove our fourth quarter operating income to 11% a level last achieved in the third quarter of 2018.
Our markets continued to demonstrate strength and provided us with excellent opportunities during the final months of the year order bookings of nearly $474 million in the fourth quarter were down less than 2% from the record established in the fourth quarter of 2021.
Despite this modest decline year end order backlog of more than $1 billion was nearly 26% higher than prior year and almost 11% higher than at the end of the third quarter three.
The rebound in our industrial equipment Division was noteworthy as order bookings were 20% higher than the fourth quarter of 2021.
Orders from the vegetation management division declined 15% relative to the prior year fourth quarter.
This was partly due to our decision to conduct only a limited preseason program in the North American agricultural mowing businesses, given the very high order backlog in this segment.
Activity in our governmental markets at the state County, and municipal levels remained robust during the fourth quarter.
According to the National Association of State budget officers state agencies recorded spending growth of more than 18%. During 2022, the highest increase in spending since the associations again, keeping records of $19 79.
In aggregate.
States General Fund revenue grew 14, 5% year over year to total $1 $1 seven trillion in fiscal 2022, following a 16, 6% increase in fiscal 2021.
Most county, and municipal governments also reported higher receipts and increased spending spending during 2022.
Our industrial customers also continued to invest in upgraded equipment for facilities and right of way maintenance at a very healthy pace.
Activity in our forestry and tree care segment remains strong and demand from the agricultural sector was very good, especially for our fourth quarter.
As we look ahead, we continue to be encouraged by the positive trends visible in our markets and we remain optimistic about the company's outlook for the coming months.
While we remain vigilant for signs of a potential recession, we've not yet witnessed any trends that are cause for concern for at least the first half of 2023 are large and healthy backlog provides several quarters of excellent forward visibility our focus for the next several quarters. Therefore remains on achieving further improvements in the performance of our some.
Fly chain driving our internal efficiencies higher still accelerated recruitment of skilled employees and continuing to optimize our manufacturing capabilities and footprint. We're also excited to introduce several hybrid and fully electric versions of our core products at the upcoming Con Expo show next month in Las Vegas. This.
Includes our prepared remarks, we're now ready to take your questions. So operator. Please go ahead.
Thank you we will now be conducting a question and answer session.
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Your first question comes from Chris Moore with CJS Securities. Please go ahead.
Good morning, guys, congrats on a terrific quarter.
Alright, so so revenue growth for the year was 13%.
Consensus for 'twenty, three before Q4 was a little bit north of 5% and understanding you guys don't guide, but what would be the puts and takes for Alamo to come in.
Significantly above or below the 5% level in 2023.
Okay, Chris Great question.
For the last couple of quarters on the call calls I've made a fairly consistent remark, but just a little bit of supply chain improvement quickly lever itself in terms of our sales and profitability and I think we saw that start to happen now in Q4.
I mentioned, the big increase in receipts of class eight trucks, we still LIBOR the bookings are growing faster than the increase in the receipts of the chassis, but thats a very very nice position to be in so the only thing that would really take to answer. Your question is for that trend to continue for the supply chain to continue to improve its performance for supplies to be a little bit.
Readily available and for us to continue doing what we're doing which is get more people on a dry dock capacity is higher as well I wish I could tell you. There was some magic in the formula but that really is just doing the basics and doing them well.
And that that visibility from where you sit now in late February versus you know late or mid November is it has it changed much I mean were you surprised that it's at the level of chassis availability and in Q4 or are you.
You could see that in November .
Chris you've got to go back actually Q3, if you recall, we had a fairly poor Q3, because some of the chassis. We expected that quarter were pushed back into Q4. So we got a boost as part of it but also the long haul over the road truckers that operate large fleets are slowing their spend on trucks now.
There's a few more plants eight chassis coming available from our traditional suppliers, which is starting to improve our position I think thats going to continue for a bit from what we're hearing we're fresh off meetings with all of the me too or truck Oems and the picture is sounding much better than it was a few months back.
Got it that's very helpful.
12% operating margins medium term goal of talked about that a few times now that Q4 has done you had a record 11% Q1's, almost two months in.
Any updated thoughts in terms of of that 12% visibility is is that just a.
Pure supply chain conversation also or anything else, we should be thinking about.
No I think it's just more of us doing what we do Chris supply chain for sure I've said that several quarters in a row now thats the biggest driver.
<unk> to consolidate our operations and really doing a good job of executing this making market strategy that we've talked about a few times producing products closer to the point of consumption. So that we don't have inventory of time lags associated with shipping products across the Atlantic Ocean primarily.
As a fact interim continuing with the consolidation of our footprint.
At the same time, we are accelerating our investments in our manufacturing capabilities Baidu machine tools getting more automation and more robotics, because we recognize we're going to be in this labor constraint for some time to come on track none of US can really get you an answer to that to be candid.
Got it helpful and just last one for me in some of Richard's comments on cash flow. So obviously had a good Q4. After you had a lot of working capital build in the first nine months.
He is still a.
Ah is still up quite a bit so just in terms of of 23 thoughts.
It should be pretty strong certainly.
The beginning of the year or is that kind of what I heard or.
Yes, Chris I don't think Thats going to change at all I think our accounts receivable is going to be very strong as we continue to do the sales levels that were expecting to hear it's kind of stay up our dsos are in excellent shape. So I'm not worried about a collection issue here.
So I think incoming cash is going to remain strong first second and third quarter for acute space, we're doing right now.
Perfect I'll leave it there thanks guys.
Thanks, Chris Thanks, John .
Next question, Greg Burns with Sidoti <unk> Company. Please go ahead.
Good morning.
Oh.
What is the outlook here outlook here for the the AG business have you seen any change in the demand trends there I know in the past you've talked about dealer inventories as a <unk>.
Maybe.
Something you look at but has there been any change in that market at all.
Dealer inventories are rising slightly but I think most of us to serve the industry think thats a pretty good thing not a bad thing at the moment.
Where it sits right now it's a good thing the.
The trend in AG has been surprisingly strong to be candid with you I think that we were seeing some signs of weakness back in the first quarter of last year.
But it's been a good pace in the bookings to remain good and honestly the activity level seems just fine right now.
It's surprising it's that.
I'm surprised the cycle has lasted as long as it has to be candid with you, but it still shows excellent legs for foreseeable future.
Okay, Great and then.
On the industrial side the.
The strong order growth that you saw this quarter was that.
Any product line in particular or is it more across the board any color there.
I think it's been pretty much across the board, we had changed our strategy in snow removal a couple of quarters ago, we have traditionally been a supplier of attachments for snowplow trucks and the like so we made the plows, we made the salt spreaders, but we didn't build the trucks themselves and we shifted our strategy to produce the complete product and deliver a complete product.
On to the state County, and municipal operators large contractors and the like that increased our demand for chassis. So thats part of what you saw in what we refer to this persistent constraint on the chassis supply so that part of the business has picked up very nicely.
That strategy has been very appreciated by the large operators are so snowplow equipment.
On the balance of the Industrial Division Street sweepers have been rebounding very nicely have been strong on our vacuum truck business has remained strong all the way through it's been robust our rental fleet utilization is sky high I don't want to cite a number for obvious reasons, but it's at a very very high level in fact, I'd like to get some more trucks into that rental fleet.
<unk>.
Soon so no it's pretty much across the board everything was good in industrial they've just been waiting for chassis and those chassis are beginning to finally flow through now.
Okay, and then let's see where are you in terms of price costs have you have you been.
<unk> been able to completely offset inflation at this point.
Do you feel like the pricing you have in the market.
Now is sufficient to accomplish that.
Yes, we have I mean, we raised prices every year at the start of the year than we have in 2023 as well that's just part of our discipline as a company I do think we are in front of it Greg our margins have been expanding.
Only offset by our operating efficiencies as we commented the last couple of quarters, but operating efficiency did improve in Q4 as the supply chain began to stabilize so yes, I'll give you a clear answer I think we are out in front of it and I think we're in a very nice fit.
We actually moved out some of the.
Weaker backlog, we had in Q4, so we're in a very nice position now as we head into the early months of this year.
Great. Thank you.
Thanks, Greg appreciate it Greg.
Next question, Tim Moore with Cowen. Please go ahead.
Thanks, and congratulations on the strong sales growth an impressive new orders increased.
I'm looking at your backlog, which is a record number.
I'm, just trying to get a sense of how much higher maybe that gross margin can be compared to a year ago.
I think one difference might be causing.
Net price realization.
Time around compared to orders as you know more than a year ago.
I'm just trying to think if we don't do another preseason program.
And you don't have to back out maybe some of the freight surcharges by this summer.
Could the gross margin on your backlog would be about 100 basis points better than a year ago.
It's hard to say I would say it would be better off in our backlog right. Now has got all of that pricing in there that we've been doing for all of 2022. So we feel very comfortable with that and I think as Jeff has mentioned the key here is to have a consistent flow through the manufacturing plant. We do that we're going to actually have the margins exactly.
Right.
And Tim This is Jeff one other thing I would say to you about that is that.
Governmental side of our business it's more.
Difficult to reprice backlog, we had some success, but not nearly as much as we would have with our vegetation management division. So some of those older contracts that were taken at the start of the supply chain <unk> moved out into Q4 and those were the lower margin ones. So we actually have better pricing profile in backlog now and we've had the last couple of quarters.
That's great that's good to hear that Thats rolled off recently.
It makes sense and just related to some comments you made earlier and something that's been going on for.
Yes, mostly in the last year.
You've had you've had.
On an absorption headwind when you go back and finished final assembly stage after.
And carrying an extra expense to reset that for a couple of parts. There arrive a few months later.
How much better is that improving the last few months or is it about the same as it might have been last summer and fall.
The last couple of quarters.
Tim.
We were probably $30 million or so maybe even a little bit more on our work in process. We ended the year 'twenty two.
So I think some of that supply chain move through is really pushed the area, where we need to go and get that number down we still have more room to growth.
Growth I mean to reduce that.
If we can continue to keep the supply chain.
Through the system at late as I think that number's going to keep coming down which is what we want.
Tim It's Jeff I'll add a little bit more color to that for you in the way the facilities are operating right now while the supply chain is improving and more material is flowing through it tends to flow through in the last month of the quarter.
It's just the behavior of manufacturing I guess, and so we get a surge of equipment coming in the final week. So we're still having to burn pretty good bit of overtime.
<unk> products out in the final weeks of the month, we don't like that that's not our tradition.
But thats kind of where we are frankly, so they are nice to move to get the efficiency drives a higher we've only improve them out of one third of where I think they ought to go there's still a lot of room for improvement I think the other key here too is just consistency from the suppliers, we can hit that a little bit more.
Slowing a little bit more equally each individual month inside the quarter I think it would be great.
Thanks for the color and quantifying that it's nice to hear thats going in the right direction.
Was there any uptick or do you think there'll be uptick in demand from <unk> streaming tree care from the the.
The recent Texas ice storms in on that.
Flip side is there probably.
Maybe any demand loss.
And not a great snowy winter in parts of the U S.
Okay.
Give me my first comment on the Texas Winter and forestry, probably not much because the types of the low end of the product range the range more than the high end and if you don't have that shipper on the shelf you don't sell it so mostly its contractors operating their current fleets that the market doesn't react that quickly.
That's what I'm trying to say it does help our parking business for sure.
In the short run I would tell you. This winter has always been already been excellent for snow removal. The early snowfall is what really helps us when it starts to snow in October and November as it did this year.
People start, putting new new blades, where tips on the plows and really working so our parts business picks up we have already had all time record backlog and snow I mean snow is just selling really really nicely right now, particularly since this change in our strategy and I think we've got a reputation to be a good builder of soap box trucks.
Produce a quality product and we feel we've been gaining market share in that space.
So I think that we've already seen that uptick the backlog is high enough now it'll be hard for you to measure it from here to be candid with you because it is kind of take out the cyclicality of the business.
Great. So two more quick questions the.
First one is around SG&A and it was nice to see that as a percentage of sales declined to 14%.
<unk> to 15% to 16% the prior two years.
Richard do you think thats sustainable for 2023, or you think it will tick back up a bit if there is any.
Travel costs are onetime costs to come back.
Tim you could have some movement a little bit in there, but I think overall portfolio year Theres. A reason why that number can't stay in that same range here are our job is to make sure that we continue to keep those in check in control and we have done a great job, we were a little bit aggressive after the first quarter of this past year because of the inflation that was.
Going on in the pricing that we had to keep putting in place for all of our products.
So I mean, if we're going to do that and we are having that heavy cost we had to do something and controlling expenses was where we needed to be we will keep that in check. It doesn't mean, we're not going to spend money on.
SG&A. It just means we just need to keep an eye on it and yes, you could have a few bumps here and there just depending on the how the shipments go out but overall the numbers should stay relatively percentage wise should stay relatively close to the total sales yet I would emphasize on the percentage side, because we've made our first round of significant investments in electrification of our.
We have a second round now to move from prototyping to production machines that will flow through largely in the back half of 2023. So I think it will edge up throughout the year in dollars not necessarily in percentages.
No that makes sense. Good I always think about it in terms of percentages and then my last question related to one that I asked last quarter if I.
I recall, you were doing a study or a policy that was underway for.
Or maybe accelerating your in country made production in Brazil, Australia, maybe U K and France.
Save on transportation cost and improve the lead time for delivery to customers.
How big of a.
Action plan is that this year and when do you think you might start seeing gross margin improvement is that more of a fourth quarter story for timing yeah. It is it takes a while we have to do some groundwork within the legal structure of our company we have to move intellectual property around to facilitate that then we have to change tooling and some of our facilities, but we're.
<unk> into that we've already seen some benefit from it.
Still in the very early stages of that and I think you'll start to see meaningful progress on it in Q4, and then much more so as we head into next year.
Add to that too division heads gray burdened by Parliament has done an excellent job working groups.
Groups together to work with each other on this because this is what's going to make the difference as we go forward as we've said before the cost of moving things is just ridiculous.
Having that opportunity where these guys are working with their crews.
Huge it makes a big difference and allows us to be able to to build this product worldwide, which is exactly what our incentives.
Great. That's helpful. I think that's a big catalyst that you'll get benefits there.
Starting later this year. So thanks, a lot that's it for my questions.
Okay. Thank you and thanks Dan.
Once again, if you would like to ask a question. Please press star one on your telephone keypad.
Your next question comes from Mike Szeliski with D. A Davidson. Please go ahead.
Good morning. This is David Johnson on for Mike.
Hi, Good morning, I was wondering hey, there morning. Good morning, I was wondering with operating margins and potentially free cash flow, taking a step up in 2023, what's your appetite for M&A from here given the growth of the company and the low leverage on the balance sheet at the current time are you looking at larger deals that we've seen in the past.
Yes.
Okay.
Okay great.
I don't want to give you examples for obvious reasons, but yes, we are looking at larger deals and we've said that for some time.
Particularly in Europe , the market in Europe looks good to US right now we've always wanted to balance our portfolio a little bit more between North America and Europe .
And to grow our forestry and tree care business in Europe . We've stated those things several times. So yes, we are very actively looking for larger deals at the moment and I think that the.
Timing is good for companies like us right now.
Alright, that's great to hear.
And lastly, you mentioned labor availability, especially in manufacturing can you take us through any initiatives, you're working on to get those positions filled.
Yes, we've been increasing our apprenticeship programs looking at certain operations that we can fully automate not just partially automate but fully automate.
And just increasing outreach in the communities, where we operate and then lastly through this manufacturing.
Footprint reengineering, we're able to liberate labor. So we made that people sign up and low volume production in one country, where we're shipping the product to another destination, we can get better utilization of our bigger factories, if we consolidate that closer to the point of sale. So that also helps us from a manpower point of view, but.
It's going to take a lot of work through those things, we're still down several hundred employees from where we would like to be in.
That's a tough fight right now.
Understood. Thank you for taking my questions.
Thank you. Thank you. Thank you.
Thank you I will now turn the floor over to management for closing remark.
Okay. Thank you that concludes our remarks for this conference call. We look forward to speaking with you again at our May conference call for the second quarter of 2000, 22023 I apologize.
This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.
[music].
Uh huh.